MIP (Mortgage Insurance Premium) Definition
MIP (Mortgage Insurance Premium) consists of annual payments on HUD mortgages. MIP is first paid at closing, and typically costs 1% of the loan amount, though this varies. MIP for HUD multifamily loan programs must then be paid annually. Specific costs also vary by program.
For example, MIP requirements for the HUD 223(a)(7) loan include:
Market Rate Properties: 0.50% upfront, 0.50% annually
Affordable Properties: 0.35% upfront, 0.35% annually
Green MIP Properties: 0.25% upfront, 0.25%
annually
In contrast, HUD 221(d)(4) MIP requirements include:
Market Rate Properties: 0.65% upfront, 0.65% annually
Affordable Properties: 0.45% upfront, 0.45% annually
Section 220 Properties: 0.70% upfront, 0.70% annually
Green MIP Properties: 0.25% upfront, 0.25%
annually